Travel insurance: Tension-free holidays

When 51-year old Anand Patwardhan, a senior executive with a multinational corporation was on his way to catch a flight from Mumbai to New York, he had little idea of the troubles that fate had in store for him. The drive to the airport was painstakingly slow due to traffic jams en route. To add to his stress, the flight got delayed by four hours due to fog at the airport. Since he is a diabetic, the time zone changes and altered meal times took a toll on him and he developed severe hypoglycaemia [drop in blood glucose level] during the flight. By the time his flight landed in New York, his health deteriorated to the extent that an ambulance had to be summoned to rush him to a nearby hospital.

Implicit to say that besides the physical trauma, Patwardhan would have to suffer a severe financial setback, given the prohibitively high cost of healthcare in the U.S. What saved the day was his travel insurance policy that covered medical emergencies such as this!

As more and more people [including the elderly and those with prior medical problems] travel abroad for work, leisure and education, the probability of a mishap during the trip can’t be ruled out. Hence purchasing a travel insurance plan that offers adequate cover for a range of medical and non-medical problems is the ticket to a tension free holiday. It is crucial to note that the mediclaim policy that you own in India annuls when you are on foreign soil.

While travel insurance is becoming mandatory for trips to an increasing number of countries, you should purchase it for your own safety even when travelling to destinations that haven’t made it mandatory.

What is covered

All travel insurance policies offer protection against medical and dental emergencies and accidental death and dismemberment. Some may even have provision for a daily cash allowance in case of hospitalisation. Most travel insurance policies also provide you compensation in case of a host of non-medical mishaps—cancelled flight, missed connecting flight, loss of checked baggage, delays, loss of passport and cancellation of trip. Some also provide assistance in case you face a financial emergency abroad. Many policies these days go as far as providing facilities for evacuation in case of a medical emergency and repatriation of mortal remains.
To acquaint yourself with exactly what is covered, you should go through the fine print of the policy document, as the details vary from one policy to another. With the entry of private insurers, the plain-vanilla overseas travel insurance of the past is now being overhauled and several innovative features are being added. For instance, frequent business travellers now have the option of buying a year-long policy that covers several trips. Students going abroad for education can now, for a fee, get a cover that compensates them for their advance tuition fee in case their studies get interrupted due to an illness. Another feature they can avail of is the sponsor protection cover. Where the policy pays their remaining tuition fee if the student’s sponsor either dies or is permanently disabled.

Many insurers also offer what is called a compassionate visit cover. If a student falls ill during his tenure abroad and is hospitalised for more than a week, this cover will pay for the return ticket and boarding of one family member, so that someone is able to pay a visit to the ill. Students going abroad for pilot training can also buy in-flight insurance cover. Payment of an additional premium can, in addition, cover the student for mental and nervous disorders, alcoholism, drug dependency and sport injuries. Responding to demand from high net worth individuals, insurers have now also begun to provide cover for adventure sports. Some family covers also offer insurance for children below a certain age at zero cost.

Amar Pandit is the founder and CEO of My Financial Advisor and best-selling author of The only Financial Planning Book that you will Ever Need. He is very passionate about spreading financial literacy in India and does so regularly through his sharp and analytical columns in various newspapers and websites.

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